Crypto Conglomerate DCG Suspends Dividends Amid Distress At Genesis Unit (cointelegraph.com) 16
An anonymous reader quotes a report from CoinTelegraph: Venture capital firm Digital Currency Group (DCG) has told shareholders it is halting its quarterly dividend payments until further notice as it attempts to preserve liquidity. According to the letter sent to shareholders on Jan. 17, the firm is focused on "strengthening our balance sheet by reducing operating expenses and preserving liquidity." Its financial issues are derived from the woes of its subsidiary, crypto broker Genesis Global Trading, which reportedly owes creditors more than $3 billion and DCG is also considering selling some of the assets within its portfolio.
Customers are currently unable to withdraw funds from Genesis after it halted withdrawals on Nov. 16, which has prompted Cameron Winklevoss -- on behalf of his exchange Gemini and its users with funds on Genesis -- to call for the board of DCG to remove Barry Silbert as CEO of the firm in a Jan. 10 open letter. According to Winklevoss, Genesis owes Gemini $900 million for funds that were lent to Genesis as part of Gemini's Earn program, which offers customers the ability to earn an annual yield of up to 7.4%. He also claimed DCG owed $1.675 billion to Genesis although DCG boss Barry Silbert denied this. Soon after, on Jan. 12, the United States Securities and Exchange Commission (SEC) poured fuel on the fire charging both firms with offering unregistered securities through the Earn program. DCG "owns Grayscale Investments and its series of digital asset trusts and has invested in over 200 companies within the crypto industry including recognizable names such as blockchain analysis firm Chainalysis, stablecoin issuer Circle and digital asset exchange Kraken," notes the report.
Customers are currently unable to withdraw funds from Genesis after it halted withdrawals on Nov. 16, which has prompted Cameron Winklevoss -- on behalf of his exchange Gemini and its users with funds on Genesis -- to call for the board of DCG to remove Barry Silbert as CEO of the firm in a Jan. 10 open letter. According to Winklevoss, Genesis owes Gemini $900 million for funds that were lent to Genesis as part of Gemini's Earn program, which offers customers the ability to earn an annual yield of up to 7.4%. He also claimed DCG owed $1.675 billion to Genesis although DCG boss Barry Silbert denied this. Soon after, on Jan. 12, the United States Securities and Exchange Commission (SEC) poured fuel on the fire charging both firms with offering unregistered securities through the Earn program. DCG "owns Grayscale Investments and its series of digital asset trusts and has invested in over 200 companies within the crypto industry including recognizable names such as blockchain analysis firm Chainalysis, stablecoin issuer Circle and digital asset exchange Kraken," notes the report.
Good riddance.... (Score:5, Interesting)
These bottom feeders are going to accelerate their tightening orbits around the drain as the global economy slides into recession and investors sour on ponzi scheming. That will leave the dregs of the industry to "trade" among themselves in an attempt to show that there is activity in the ecosystem.
Seeya.
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earn an annual yield of up to 7.4% (Score:3, Insightful)
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The annual yield they advertise is enough to know this is a Ponzi scheme.
"Up to" means "less than."
So zero percent is "up to" 7.4%.
I have up to a billion dollars in my pocket.
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"Irrational exuberance" was the cause of the last financial global meltdown in real estate securities. It's the same story here - If it's too good to be true, it's a LIE.
It's the same as those scammers on Amazon selling 16tb SSDs for $100.00, when in reality they're (if you're lucky) it's a 64gb flash card in a crap enclosure. So you're paying $100.00 for a $10 SD card.
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If MY mom offered me one of these for my birthday, we'd ALL run out of the room looking for axes and shotguns and whatnot. Because she'd be mighty pissed, since we buried her a couple of decades ago. ZOMBIE ALERT.
I do have a couple of 4tb SSDs and a pair of 4tb M.2 drives on my shopping list - but not until they come WAY down in price. Same as I opted for a pair of Intel Arc 770LE 16gb video cards - voting with my purse, Screw NVidia and AMD for trying to get crypto pricing in a post-crypto world! A 16 g
Thoughts and prayers, thoughts and prayers (Score:3, Funny)
We hope you and, indeed, crypto conmen everywhere, make it through these troubled times, poor but educated, so you never pull this shit on anyone ever again.
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The problem is that the current con people are but a fraction of the con people who will follow on, with a cry of, "We can do better than they did!"
Their problem is that they're trying to do what governments do (issue money) without the stability of, well, being a government.
Nothing to see her (Score:1)
what happens (Score:2)
when the same dollar gets loaned out seventeen times
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Yeah, but unlike in Crypto there's eventually something tangible
Not a house of cards at all... (Score:5, Funny)
People keep saying that the collapse of cryptocurrencies is like a house of cards coming down. It's not that at all.
It's more like a whole neighbourhood of fancy mansions that was built by an unscrupulous developer, on some land that had been temporarily been drained to hide the fact that it was a swap. The contractors completely ignored all the relevant building codes and now all the houses are catching fire, tipping over and sinking into the ground. None the less the people who bought places, and the real estate brokers who made a profit from them, are going to be around for a good long time, trying to get their money out, saying "OK, but just look at the beautiful view you get! It just needs a little DIY and you can't go wrong!"
Another Ponzi scheme poping! (Score:2)